What is the proper answer for the definitions of the payout ratio vs. the retention ratio? Multiple Choice Retention ratio is equal to net income, while the payout ratio is the dividend payout After a firm calculates the net income, it decides what proportion of this to pay in dividends (payout ratio) and what proportion should go into retained earnings (retention ratio) o o The retention ratio represents the percentage of the net income which is required to be used to pay off debt